The Future Of Engaging Talent For Business Owner Succession
You will not get a Superman or Wonder Woman if you hire a GM for your small or medium-sized business.
We have met many business owners who have tried unsuccessfully to do this themselves. Whether the person comes from within or externally there are some key reasons for this.
Talent is not always easy to find and as a business owner, you are competing with corporate businesses who can pay much higher salaries to get talented people. If you are simply paying a salary the corporate business will always beat you. You will often then end up with a less skilled and experienced hire.
As a result of this many business owners :
- promote internally above a person's capabilities
- advertise and simply find someone actively (or desperately) looking for a job
- don't have a clear role created for the GM and just "wing it"
- bypass a competitive process and go for a "convenient hire"
If the person you get is talented, they will treat it as a stepping stone and move on to a better offer financially from a larger business.
So what can you do?
The answer is getting a Business Partner from outside your business who buys into the business. They won't cost you any more than a salaried GM but will come with significantly more horsepower to grow your wealth. Because they will gradually buy into your business they won't leave for a "better offer"
"Offering equity levels the playing field in gaining talent for your business"
Why a Business Partner with capital and a clear structure in place is often a much better option:
- They will work like an owner, not an employee
- They will have come from a larger more complex role, be more skilled and enticed by "skin in the game"
- You will have the confidence to take a break from the business at times and improve your lifestyle
- It will allow you to work on the parts of the business you enjoy and are good at
- It can form part of your succession plan
- They will bring skills and fresh thinking to grow your business
- They will know how to harness technology to grow your business
- You can increase your wealth as you keep getting dividends as well as capital payments from any further tranches of equity
Finding a Business Partner and setting up a structure can be a challenging and complex process. It's all about finding the right person through a competitive process and setting up a documented and independently guided process.
About the Author
Mike Warmington is a Director of Platform 1 NZ Ltd - The market leaders in business owner transition. The business specialises in using executive search techniques to find people with capability and capital for SME business owners wanting to transition.